As many expected, the real estate market would halt because of the pandemic, and it certainly did, with sales plummeting at the tune of 57.6% from the same time last year.
Homeowners are becoming more reluctant to post their house on listings, as April figures dropped 55.7% compared to March. Owners aren't selling now unless they get an offer out of the gate that they like, or they're forced to because of covid-19 layoffs. Either way, sellers in the market are reluctant to let go of their property in a volatile market and are sure they can get better offers down the road.
However, even though listings are down the toilet, demand for real estate still remains. The national price average for homes dropped just 1.3%, and year-to-year numbers show that the number has increased by 0.1%.
However, the real estate market operates seasonally, and realtors were in for a big spring season, with prices once believed to climb back to 2017 highs. What was supposed to be one of the best seasons for realtors this year quickly turned south because of the coronavirus.
The real estate market has basically shut down, and unless an influx of sellers lists their homes on the market, home buying is essentially "on ice.
Funny enough, Canadians have been saving more since the pandemic. According to numbers from the RBC, credit card spending was down 60% from the end of March compared to the year before. With many retailers and restaurants barely operating and travel restrictions, consumer habits have changed, with essential buying and online shopping being the main expenditures. Will these habits continue? That's for another article. But the trend of Canadian saving could be a sign for a healthier real estate market in the future, as more hopeful buyers will be able to put their down-payment and afford their mortgage payments.
The verdict for the real estate market in April? As most people thought, the market was bound to face tough times this spring, but as long as restrictions continue to be lifted as they have here in Ontario (golf courses opened!), there should be a slow recovery in the market. Seller's might be a bit more cautious and decide to wait longer in hopes of a better offer, but if buyer demand remains, then real estate will return, eventually.
Our prediction? May numbers will still look grim. Yes, restrictions have eased a bit, depending on where you live, but now is not the optimal time to sell.